NEW DELHI: The government has earmarked Rs 12,000 crore for infusion in the public sector banks (PSBs) in the current fiscal, which is double the amount provided in the Budget 2011-12.

"A sum of Rs 12,000 crore has been provided in the Revised Estimates 2011-12...for capital infusion in PSBs to enable them to maintain a minimum Tier I CRAR at 8 per cent as on March 31, 2012 and also to increase shareholding of the government of India in the PSBs to 58 per cent," the Economic Survey 2011-12 said today.

For the year 2012-13 also, it said, the Government is committed to keep all the PSBs adequately capitalised so that the growth momentum of economy is sustained.

"As capital is a key measure of bank's capacity for generating loan assets and is essential for balance sheet expansion, the government of India has regularly been investing additional capital in the PSBs to support their growth and keep them financially sound and healthy so as to ensure that the growing credit needs of economy are adequately met," the survey said.

Finance Minister Pranab Mukherjee while presenting 2011-12 Budget last year had said: "I propose to provide a sum of Rs 6,000 crore for the year 2011-12 to enable Public Sector Banks to maintain a minimum Tier I Capital to Risk Weighted Asset Ratio (CRAR) at 8 per cent."

He had said the government provided Rs 20,157 crore for infusion in PSBs to maintain Tier I CRAR at 8 per cent and increase the government equity in some banks to 58 per cent in 2010-11.

The survey also said the government has appointed a high level committee headed by the Finance Secretary to assess the need for capitalisation of various PSBs for the next 10 years, keeping in view various challenges PSBs have to face due to the impending implementation of Basel III norms.

The Committee has submitted its report to the government which is under consideration, the survey said.

The government is signing memorandum of understandings (MoUs) with the PSBs whereby capital infusion will be linked to achieving the targets by PSBs on various key parameters on productivity, including return on assets, net profit per employee and cost to income ratio, it said.

MoUs spanning over a period of four years, 2011-12 to 2014-15, have since been finalised with all the PSBs, excluding SBI Associate Banks. SBI will be entering into MoU with its associate banks on similar parameters, it said.